An armada of Chinese cardigans and trousers is stranded in European ports: a strange sight indeed, and the strongest sign yet that the chill winds of protectionism are blowing through Western capitals. For however mundane the goods, the stand-off is deadly serious. The longer these shipments remain embargoed by the European Union’s decision last month to restrict Chinese textile imports, the greater the risk of total trade war.

Last month the European Commission decided to restrict textile imports from China, in response to a surge in Chinese production when a previous global quota system ended on January 1. China agreed to new limits on June 11 after both the EU and the US complained that rapid growth in cheap imports was threatening domestic producers. The Commission limited the growth of ten Chinese textile products, including T-shirts and bed linen, until 2008. The problem is that shipments of trousers and pullovers have already exceeded the limits.

The dispute shows, first, just how dependent the European high street has become on Chinese goods. Consumers rarely think about where their bed linen, shoes or clothes come from. But they will soon find out if they cannot get hold of them in the shops. Secondly, it has split the EU right down the middle between producing and consuming nations. Italy, France, Spain and Eastern European countries, the largest textile producers, favour a tough line. Germany, the Netherlands, Denmark and Sweden, whose retailers are facing empty shelves, are pleading for greater flexibility. Swedish retailers are threatening legal action. Peter Mandelson, the EU Trade Commissioner, blames the retailers for trying to rush through huge orders just before the ban took effect. But the British Retail Consortium contends that Brussels rushed through controls without thinking through the detail.

Mr Mandelson is in a tricky position. It certainly looks as though the Commission has underestimated the importance of Chinese textiles on the high street. But China has also exacerbated the dispute by reversing its offer to impose export duties on some sectors of its surging textile industry. When it joined the World Trade Organisation, Beijing agreed that it would accept temporary curbs in the years after the demise in 2005 of the Multifibre Arrangement. This was partly to help the other developing countries which are the chief victims of the surge in China’s exports. Beijing still sees trade as a game to be won or lost, depending on the surplus or deficit. If the US took a similar line, China would be in serious trouble.

That is exactly what may happen. US negotiators are pushing to limit a broad array of Chinese goods. The costs to consumers are less important to the politicians than the need to prop up manufacturers. China may eventually force many Western manufacturers out of business. But if opportunistic Western governments are determined to close global markets, the Chinese Government may wish that it had been less arrogant and more flexible.